Exiting a Franchise in Belarus: What to Check Before You Buy

When buying a franchise, entrepreneurs usually discuss opening an outlet, not closing it. Yet exit terms need checking before the first payment: they determine whether you can stop trading without a drawn-out dispute. Franchising brings together independent entrepreneurs, and clear rules for parting ways protect both sides. Here is a step-by-step guide to reviewing the agreement before buying a franchise in Belarus.

1. Distinguish between expiry and early exit

Belarus has no standalone franchising law, but that does not mean there are no specific rules. The Civil Code of the Republic of Belarus regulates the comprehensive business licence agreement — the legal form used for franchising. Article 910 defines this type of agreement. The Civil Code’s general provisions on obligations, amendments and termination of contracts also apply.

Start by establishing whether the agreement is for a fixed or indefinite term. If no term is specified, either party may withdraw from the agreement by giving the other party six months’ notice. The agreement may provide for a longer notice period. So wording such as “for an indefinite term” does not mean you can leave immediately.

For a fixed-term agreement, check the grounds for early termination separately. Low revenue or a change in your plans does not, in itself, give you an unconditional right to leave without consequences. Propose including a contractual right to exit on notice, and agree its terms with a Belarusian lawyer.

Draw up a table covering four scenarios:

• the term expires and you do not want to renew;
• you leave early without any breach by the franchisor;
• the franchisor breaches its obligations;
• the franchisor seeks termination because of your breaches.

For each scenario, record the legal or contractual grounds, notice period, documents required and financial consequences. An empty cell is a point for negotiation, not a detail to leave until later.

2. Check notice requirements and opportunities to remedy a breach

Even an agreed right to exit can be difficult to exercise if it is unclear how to communicate your decision. The agreement should specify addresses, permitted methods of sending notices and when a notice is deemed to have been received. Do not assume that a message to a manager via a messaging app will serve as formal legal notice.

Pay particular attention to the grounds on which the franchisor can terminate. Phrases such as “reputational damage” or “failure to comply with standards” need to be specific: which actions constitute a breach, and what evidence is required? Otherwise, even a fixable issue with an outlet’s appearance could lead to a dispute.

Ask for a procedure for remedying breaches that includes:

• a written description of the issue, with supporting evidence;
• a reasonable period to put it right, taking account of the nature of the problem;
• a follow-up inspection against clear criteria;
• a separate list of material breaches to which a different procedure applies.

This is a matter for negotiation, not a universal safeguard automatically available to every franchise buyer. Nor should you assume the opposite: having such a procedure does not remove your obligation to meet quality standards and fulfil your other duties as a franchisee.

3. Decide what happens to assets and outstanding orders

Terminating a franchise agreement does not, in itself, end your premises lease, employment relationships, loan agreement or supplier contracts. Before buying, compare the terms of these commitments with the proposed process for leaving the network. For example, being able to end the franchise before the lease expires leaves you with premises you still have to pay for.

Separate assets into those you own, those you lease and those supplied by the franchisor. For each item, establish what happens after exit: return, buyback, sale by you or continued use without the branding. Pay particular attention to specially configured equipment, signage, packaging and remaining stocks of branded goods.

Do not assume a buyback is guaranteed. If the franchisor promises to take back equipment, the agreement needs to specify the items, their condition, how the price will be determined, payment deadlines and transport costs. A promise to “help you sell it” is not a commitment to buy it back.

Allocate responsibility separately for outstanding orders, advance payments, gift vouchers and warranty claims. Agree transitional arrangements for serving customers, but remember that an agreement between business partners does not override customers’ statutory rights.

4. Reduce uncertainty after termination

List the steps needed to stop using the brand: remove signage, change the website’s design and branding, disable advertisements and return materials. Deadlines should be technically achievable and aligned with the point at which your right to use the relevant intellectual property ends.

Decide in advance what will happen to the telephone number, domain name, social media pages and access to the business management system. If these are all registered to the franchisor, you cannot assume you will retain them. If they are registered to you, the agreement may still require you to transfer them or change their branding.

Customer data requires a separate procedure that complies with the Republic of Belarus Law on Personal Data Protection. Neither transferring the database to the franchisor nor retaining it as a former franchisee becomes lawful simply because the parties have agreed to it.

Have a lawyer review confidentiality obligations and non-compete restrictions separately. Check their substance, duration, scope and enforceability under Belarusian law. A requirement to stop using someone else’s brand should not automatically be treated as a ban on continuing any independent business activity.

5. Put the procedure in writing

Ask for a draft termination agreement while you are still considering the purchase. It is useful for this to cover a final reconciliation of accounts, the handover of assets, removal of access rights and a procedure for resolving outstanding claims. Do not sign an unconditional declaration in advance that you have no claims: first check that the obligations have been fulfilled.

A franchise agreement in Belarus must be in writing and registered with the National Centre of Intellectual Property (NCIP). When preparing to exit, instruct a lawyer to check the formalities and registration requirements for termination: simply closing the outlet is not enough.

Practical takeaway: before buying, get written answers to three questions: how you leave, what you pay and what you keep. If the answers depend entirely on the franchisor’s future goodwill, the terms are not yet ready to sign.